Top-10 reasons why NewsFutures is the ideal partner to harness the wisdom of your crowd

1.) Integrated Solutions

We offer complete solutions, not just great software. This approach delivers a much higher success rate and enables the client organization to fully consider Prediction Markets as a key decision-support tool.

From experience, we know that a successful prediction market project requires a lot more than great software or a cool website. Above all:

- Featuring strategic and well-defined questions;
- Securing a high participation rate;
- Integrating the market into the management and decision-making processes.
- Our project management checklist covers 30+ task components of market design, market implementation, and market administration. To ensure success, NewsFutures offers hands-on management and best-practice advice at every stage, in close contact with the client-side team. And if the client is willing to handle some of those tasks itself, we make sure to transfer the relevant knowledge and skills.

2.) A suite of powerful tools

Our platform offers a full suite of knowledge aggregation tools that are optimized for various forecasting needs and business contexts: prediction markets, and more, much more.

As an early pioneer in the field of enterprise prediction markets, NewsFutures has been among the first to recognize not only the power of this tool, but also its various practical limits in certain situations. We are experienced enough to recognize when other knowledge aggregation mechanisms may offer more practical or productive solutions.

That’s why, in close collaboration with some of our clients (in particular InterContinental Hotels, Eli Lilly, Arcelor Mittal, and Pfizer), we have developed a suite of innovative software tools that enable us to optimally aggregate predictions in a variety of business contexts. All of these tools are currently fielded with various clients.

Our software platform currently includes:

Prediction Markets. A continuous double auction trading engine (with optional market maker) is particularly appropriate for measuring risks and opportunities as event probabilities. It can also be used to forecast continuous variables.

Competitive Forecasting. Designed for collective forecasting of specific business variables, such as quarterly sales, especially under several conditional scenarios, or with a small pool of participants.

Idea Pageant. Ideal for rapid harvesting and filtering of a large number of new ideas that require evaluation and prioritization.

Impact Matrix. Used to collect and gauge the likelihood and business impact of various events in the very long term.

This versatile set of tools enables us to propose and implement the most effective solution in every case.

3.) World-Class Expertise

NewsFutures has the longest record of implementing enterprise prediction markets, the most extensive enterprise client list, and the widest geographical reach.

Our team has been immersed in every aspect of delivering successful enterprise prediction markets since 2002. We have implemented internal markets and external markets of all shapes, durations and sizes, around the world: U.S.A., Brasil, France, U.K., Germany, Holland, Japan, Hong Kong, and as far as New Zealand. We have built the longest-running continuous client relationship in the industry (servicing Eli Lilly since 2003).

Our methodology and technological solutions have been shaped by this rich history of confrontation with reality. We know that implementing a successful enterprise prediction market requires clear goals, significant resources, constant care and monitoring, and we know what it takes to deliver success. No other team is more seasoned.

«NewsFutures has done some of the most innovative work in the area for longer than most. They were in there making it happen for real while others were clueless on the fringes.»
- Ajit Kambil – Gobal Director, Deloitte Research

Notably, we have also built our eponymous public prediction exchange into one of the best known play-money exchanges. The experience of running this market non-stop since the year 2000 gave us deep insights into what it takes to successfully manage a market for the long run.

4.) Creative leadership

NewsFutures is a thought leader and a creative driving force within the industry.

NewsFutures started implementing prediction markets in 2000, years before the buzz words “wisdom of crowds” and “web 2.0″ even surfaced in the brains of James Surowiecki and Tim O’Reilly – and we’ve been at the forefront of innovation ever since: Over the years, we’ve fielded several innovative tools for harvesting the wisdom of crowds in various enterprise contexts, and we even applied for a pending patent on a multi-outcome continuous double auction (CDA) trading engine.

In 2003, NewsFutures led the first field study comparing real-money and play-money markets, publishing the results in a landmark article co-authored with some of the field’s leading academic researchers: Prediction Markets: Does Money Matter? – Electronic Markets, 14 (3), September 2004. This research significantly enhanced the credibility of play-money markets and, as a result, boosted their adoption within enterprise contexts.

In 2007, NewsFutures started experimenting with an innovative business model for real-money public prediction markets: Bet2Give.

NewsFutures work has been covered on television by CBS News (here) and CNBC (here), and in print by prestigious publications in the United States and Europe, including James Surowiecki’s international best-seller The Wisdom of Crowds.

Our CEO, Emile Servan-Schreiber, has lectured on the topic all over the world, including at the World Economic Forum in Davos, Switzerland, and at the Wharton Business School.
In recognition of NewsFutures’ practical and throught leadership, Emile was chosen to chair the new Prediction Market Industry Association. He is also an associate editor of the Journal of Prediction Markets.

5.) Customized solutions

Our software platform is customization-friendly, enabling us to tailor our solutions to a client’s special needs.

When dealing with high-end demanding customers, one size cannot fit all. The NewsFutures philosophy is to tailor a market solution to the problem at hand, rather than force-fit the problem to a pre-existing market template. That usually means, in addition to choosing the most appropriate tool and market design, customizing the user interface to optimize the integration with the client’s IT infrastructure and the navigation among various markets.

It also means being responsive to customer requests for additional features that extend the platform’s capabilities, and sometimes even developing completely new tools. (Indeed, this is how we came to develop and integrate into the platform a whole suite of original tools in addition to prediction markets.)

In contrast to the one-size-fits-all market and navigation templates provided by others, the NewsFutures software platform offers the flexibility needed to address the unique needs of demanding customers.

6.) Industrial-strength software

NewsFutures software satisfies the highest professional standards and demanding environments.

Internet giant Yahoo!, who knows a thing or two about quality software, chose to acquire the source code of our prediction market engine to power its own Yahoo! Tech Buzz Game.

Our platform is so reliable that it has been used to operate high-stakes real-money political markets for Holland’s leading daily de Volkskrant (see this report), and we currently use it to operate our own real-money prediction exchange Bet2Give.

7.) Military-grade security and confidentiality

We offer a range of access, backup, encryption, integration and hosting options that satisfies the most demanding customers.

NewsFutures has been vetted by customers who put a premium on data security and confidentiality, such as the U.S. Military, pharmaceutical clients, and others in the super-competitive IT industry.

While most clients are satisfied to host their applications on our servers, located in a high-security facility, others have had us ship fully configured hardware that they can install behind their own firewall, or had us install the prediction market application directly on one of their own servers within their existing IT infrastructure.

8.) Multilingual applications

In a global world, English is not enough.

Our software platform is designed to operate in multi-language mode, with a user interface that can offer several languages simultaneously. English, French, Dutch and German versions are already implemented. Other languages can easily be added on request. This feature is important for multinational companies that want to tap the collective intelligence of a linguistically diverse population.

9.) Round-the-clock support

Present on two continents, NewsFutures offers rapid response across many time-zones.

The NewsFutures enterprise team operates the world over from New Jersey, USA, and Paris, France. This enables rapid response in many different time zones and continuous availability from 08:00 to 01:00 GMT. We are currently servicing clients in the United States (from coast to coast), France, Holland, and as far as New Zealand. Our multi-cultural team is well suited to operate in a global world while being attuned to the importance of local differences.

10.) Team players

Although NewsFutures is equiped to deliver integrated solutions, we also have significant experience in partnering with consultancies to service their clients.

We find such partnerships rewarding and productive, and we are very comfortable with them, especially because they help implant the solutions deeper into the host organization. Over the years, we have teamed up with consultancies large and small. Among the largest are SAIC (on a U.S. Military project), Accenture (on a MIT Technology Review project), and the RAND Corporation (on a Texas DOT project).

If you are a consultancy and you would like to deliver wisdom of crowds solutions to your clients, please contact us for details of our partnership program.

1. Eli Lilly & Company forecast that 2008 earnings would be greater than Wall Street’s expectations.
2. Eli Lilly intends to seek federal approval this month for a drug to prevent blood clots.

APPENDIX: Emile Servan-Schreiber (NewsFutures CEO):

By the way, the NewsFutures-Lilly relationship may just be the longest-running working relationship between a Fortune 500 company and a prediction market provider…

A few confirmed speakers include:

* Bob Draper, Pre-Submission Forecasting Director, Eli Lilly USA
* Lars Nordmann, Director of Forecasting, Organon USA
* Etienne Adriansen, Director of Strategic Planning and Portfolio, Nycomed
* Stefano Malvolti, Global Head of Forecasting, Novartis
* Kuntal Baveja, Director of Forecasting-Strategic Global Marketing, Novartis
* Eric Rambeaux, VP – Business Strategy & Portfolio, Solvay
* Art Cook, Principal, ZS Associates
* Graham Clarke, CEO, Immunobiology
* Jeanne Penn, Associate Director CTI, Genzyme
* Zinta Krumins, Managing Director, Boehringer-Ingelheim

WARNING: Even though the Intel director uses 15 times the term “prediction markets” in this paper, the forecasting tool they have been using is another form of information aggregation mechanism.

—

Via the absolutely indispensable but nevertheless extremely modest George Tziralis, this article in the Intel Technology Journal of May 2007:

The Spectrum of Risk Management in a Technology Company – Using Forecasting Markets to Manage Demand Risk – (PDF) – by Intel Corporation‘s Jay W. Hopman – 2007-05-16

—

- Abstract

Intel completed a study of several generations of products to learn how product forecasts and plans are managed, how demand risks manifest themselves, and how business processes contend with, and sometimes contribute to, demand risk. The study identified one critical area prone to breakdown: the aggregation of market insight from customers. Information collected from customers and then rolled up through sales, marketing, and business planning teams is often biased, and it can lead to inaccurate forecasts, as evidenced by historical results. A research effort launched in 2005 sought to introduce new methodologies that might help crack the bias in demand signals. We worked with our academic partners to develop a new application, a form [???] of prediction market, integrated with Intel’s regular short-term forecasting processes. The process enables product and market experts to dynamically negotiate product forecasts in an environment offering anonymity and performance-based incentives. To the extent these conditions curb bias and motivate improved performance, the system should alleviate demand miscalls that have resulted in inventory surpluses or shortages in the past. Results of early experiments suggest that market-developed forecasts are meeting or beating traditional forecasts in terms of increased accuracy and decreased volatility, while responding well to demand shifts. In addition, the new process is training Intel’s experts to improve their use and interpretation of information.

- Introduction

[...] Tackling demand risk and other challenges requires moving information around decentralized organizations in new ways. If employees across Intel’s many functional groups have information and insights that can help inform our planning and forecasting decisions, we need a way to aggregate that information and turn it into intelligence. Prediction markets are a potential solution to this problem and have been written about extensively for the past five to ten years. Our research discovered that, despite the buzz around prediction markets, the integration of prediction markets and similar Information Aggregation Mechanisms (IAMs) into organizational forecasting processes is still in its infancy. Popular stories on prediction markets still frame the potential as being greater than the demonstrated value, and reports of usage at companies such as Hewlett Packard, Microsoft, Google, Eli Lilly, and others suggest that application is often viewed as experimental and that markets are largely separate from other organizational forecasting processes.

- Challenges to Anticipating Market Demand

[...] Decentralized organizations must find a means of transmitting business context; in other words, instead of transmitting mere data sets, they must transmit information and intelligence from employees who have it to employees who need it to make decisions and plans. We learned that Intel has many informal networks that attempt to move that knowledge across the organization, but these networks have many failure modes: turnover of employees in key positions, limited bandwidth of each individual and team, and difficulty systematically discovering the important information to be learned (stated differently, whom to include in the network). [...]

- Market Mechanisms as Forecasting Tools

[...] In our research at Intel we are extending the idea of prediction markets to create “forecasting markets,” which are essentially prediction markets or similar IAMs integrated into the company’s standard, ongoing forecasting processes. Participants reveal not just an expected outcome but a series of expected outcomes [???] for the same variable over time. So, the forecasting market captures individual and collective assessments about trends such as increasing or decreasing demand just as weather forecasts anticipate warming and cooling trends. [...] Anonymity helps prevent biases created by the presence of formal or informal power, the social norms of group interaction, and expectations of management. [...]

- Design Considerations and Elections

[...] Our overall design structures each investment as a decision based on both the individual’s expectations for the outcome and the aggregate group prediction. Participants weigh owning lower percentages of more likely outcomes against higher percentages of less likely outcomes. [...]

- Results

We are using three primary measures to assess the performance of our markets: accuracy, stability, and timely response to genuine demand shifts. Having run pilot markets for approximately 18 months, we are starting to get a sense for how the markets are performing. Although the market forecasts and official company forecasts are not independent, it is nonetheless interesting to compare the signals and then assess how effectively they are working together. In terms of accuracy, the markets are producing forecasts at least the equal of the official figures and as much as 20% better (20% less error), an impressive result given that the official forecasts have set a rather high standard during this time period with errors of only a few percent. In the longest sample to date, six of eight market forecasts fell within 2.7% of actual sales. The accuracy of the official and market forecasts has been remarkably good, well within the stated goal of +/- 5% error for all but a few individual monthly forecasts. [...] We are also amused that although we never publish the list of participants and winners, everyone knows who participated and who won. [...]

- Challenges

[...] As we propose market mechanisms to aid with forecasting, potential participants and managers have most often expressed three concerns: incentives, anonymity, and groupthink. [...]

- Summary and Conclusions

[...] The key drivers that we believe have led to strong performance are 1) anonymity and incentives, which encourage honest, unbiased information, 2) the averaging of multiple opinions, which produces smooth, accurate signals, and 3) feedback, which enables participants to evaluate past performance and learn how to weigh information and produce better forecasts. [...] [Prediction markets] are a new approach toward business management, promising, and at the same time frightening to potential adopters. As with many such innovations, starting small and running in parallel to existing processes are keys to success. As our trials are demonstrating excellent results at remarkably low cost, expanding their use at Intel is a natural and expected outcome.

- Sidebar: Five Categories of Considerations for Designing Information Aggregation Mechanisms

Information – Integration – Inclusion – Interface – Incentives

UPDATE: Robin Hanson has a comment…

It is great to see another comparison, but it would be more persuasive if we could see a bit more detail. How many markets have been run, do they use the last price or an average for their comparisons, was the comparison mechanism able to see the market prices or vice versa, and so on.

UPDATE #2: Deep Throat…

There are not enough details in the paper.

UPDATE #3: Deep Throat #2…

It seems quite light on data and the references are pretty unimpressive.

UPDATE #4: Chris Masse thinks that this paper is significant for two reasons. Number one, it says that internal prediction markets do work at Intel and that they intend to go on. Number two, Intel has integrated its internal prediction markets into their overall business forecasting system. It’s the first that a Fortune-500 firm states that publicly, if I’m correct.

UPDATE #5: Some people in the field of prediction markets think that the Intel mechanism has nothing to do with trading and is closer to a survey mechanism.

UPDATE #6: INTEL BUSINESS CASE: Does Intel really use internal prediction markets?

UPDATE #7: Emile Servan-Schreiber:

[…] It is fairly obvious from reading the INTEL case study that they are not using a trading market at all but rather something closer to HP’s BRAIN. […]

Une activité déjà sur les rails chez NewsFutures qui, en parallèle de son site financé par la publicité, a ouvert des places de marchés prédictives privées spécialement dédiées à des entreprises. Le laboratoire Lilly, l’inventeur du Prozac, s’en est servi pour de la prospective, afin de faire évaluer, par un panel de chercheurs, les probabilités de succès de nouvelles molécules à long terme. Chez Arcelor-Mittal, des cadres commerciaux issus de différentes régions du monde y ont recours, avec un certain succès semble-t-il, pour faire des pronostics sur l’évolution des prix et des ventes d’acier. «Les débouchés sont multiples, conclut ESS, et il est évident que rien de tout ça n’aurait pu exister sans le Web.»

TRANSLATION: Eli Lilly uses internal prediction markets to assess the success of new molecules. Arcelor-Mittal uses them to predict the future price of steel and sale volumes.

- Why is it that HedgeStreet (the U.S.’s first CFTC-regulated real-money prediction exchange, a.k.a. betting exchange) is not cited?

- Could you share with us evidence that the HedgeStreet prediction markets are not accurate (if that’s the reason why HedgeStreet is not cited)?

- Would you mind stating for the record the reason why you cite TradeSports-Intrade and not HedgeStreet? Thanks.

The past decade has seen a healthy growth in the field, including a sharp rise in publications and events, and the creation of the Journal of Prediction Markets. Academic work includes mechanism design, experimental (laboratory) studies, field studies, and empirical analyses. In industry, several companies including Eli Lilly, Corning, HP, Microsoft, and Google have piloted internal prediction markets. Other companies, including ConsensusPoint, InklingMarkets, NewsFutures, and TradeSports, base their business on providing public prediction markets, prediction market software solutions, or consulting services. The growth of the field is reflected and fueled by a wave of popular press articles and books on the topic, most prominently Surowiecki’s “The Wisdom of Crowds”.

To My Readers: Midas Oracle .ORG is the only vertical spot on prediction markets that has a truly global perspective —citing both domestic/regulated and offshore/unregulated betting exchanges.

Previous: FOUR U.S. SCHOLARS ACCUSED OF ANTI-HSX BIAS + FOUR U.S. SCHOLARS ACCUSED OF ANTI-BETFAIR BIAS

- Why is it that Hollywood Stock Exchange (the world’s #1 play-money prediction exchange, a.k.a. betting exchange) is not cited?

- Could you share with us evidence that the Hollywood Stock Exchange play-money prediction markets are not accurate (if that’s the reason why Hollywood Stock Exchange is not cited)?

- Would you mind stating for the record the reason why you cite Inkling and NewsFutures and not the Hollywood Stock Exchange? Thanks.

The past decade has seen a healthy growth in the field, including a sharp rise in publications and events, and the creation of the Journal of Prediction Markets. Academic work includes mechanism design, experimental (laboratory) studies, field studies, and empirical analyses. In industry, several companies including Eli Lilly, Corning, HP, Microsoft, and Google have piloted internal prediction markets. Other companies, including ConsensusPoint, InklingMarkets, NewsFutures, and TradeSports, base their business on providing public prediction markets, prediction market software solutions, or consulting services. The growth of the field is reflected and fueled by a wave of popular press articles and books on the topic, most prominently Surowiecki’s “The Wisdom of Crowds”.

To My Readers: Midas Oracle .ORG is the only vertical spot on prediction markets that has a truly industry-wide perspective —play money AND real money.

Previous: FOUR U.S. SCHOLARS ACCUSED OF ANTI-BETFAIR BIAS

Next: FOUR U.S. SCHOLARS ACCUSED OF ANTI-HSX BIAS

- Why is it that BetFair (the world’s #1 prediction exchange, a.k.a. betting exchange) is not cited?

- Could you share with us evidence that the BetFair prediction markets are not accurate (if that’s the reason why BetFair is not cited)?

- Would you mind stating for the record the reason why you cite TradeSports-Intrade and not BetFair? Thanks.

The past decade has seen a healthy growth in the field, including a sharp rise in publications and events, and the creation of the Journal of Prediction Markets. Academic work includes mechanism design, experimental (laboratory) studies, field studies, and empirical analyses. In industry, several companies including Eli Lilly, Corning, HP, Microsoft, and Google have piloted internal prediction markets. Other companies, including ConsensusPoint, InklingMarkets, NewsFutures, and TradeSports, base their business on providing public prediction markets, prediction market software solutions, or consulting services. The growth of the field is reflected and fueled by a wave of popular press articles and books on the topic, most prominently Surowiecki’s “The Wisdom of Crowds”.

Reminder: As I predicted before the event, at the time, last year, BetFair was not cited once at the 2006 Yahoo!’s confab on prediction markets.

To My Readers: Midas Oracle .ORG is the only vertical spot on prediction markets that has a truly global perspective.

Next: FOUR U.S. SCHOLARS ACCUSED OF ANTI-HSX BIAS + FOUR U.S. SCHOLARS ACCUSED OF ANTI-BETFAIR BIAS

Addendum: Justin Wolfers comments…

For what it is worth, in a paper with Andrew Leigh, we do analyze BetFair data. Take a look at figure 2 in http://bpp.wharton.upenn.edu/jwolfers/Papers/AustralianElection2004.pdf.

I don’t think that there is an anti-BetFair bias, but rather it is a question of finding which sources have the most useful data for the research question at hand. For those of us in the US, Intrade has a stronger focus on the US, while BetFair is more useful for those in the UK, or – as in the above paper – for those in Australia.